Greg Johnson: Evolution can be messy, but the strong survive

Signs point the way to the Sevierville Golf Course and the Sevierville Events Center. Sevierville's Public Building Authority transferred ownership of both to the city of Sevierville on Monday.
(Greg Johnson/News Sentinel)

Evolution can come quickly, disturbing or disrupting the status quo, or it can come over longer periods of time in subtle, somewhat imperceptible ways. In either case, change is messy and often painful.

Change came on Monday when Sevierville’s Public Building Authority voted to transfer ownership of the Sevierville Golf Course and the Sevierville Events Center to city government.

“The PBA helped develop the golf course and the events center,” said PBA Chairman Joe Tarwater in an interview. “It’s a natural evolution to transition it to the city for operational purposes.”

For years, Sevierville has felt pecuniary pain from the golf course and events center, both perpetual money losers on an operational basis. While both contribute to city coffers by collecting taxes, neither has ever seen operational income exceed outgo.

By giving the city full operational authority, the evolution gives the city full operational responsibility. With clearer lines of authority, city residents will know who to blame if operations do not improve and can affect their own change at the ballot box if losses continue.

The ownership change is a big deal because of a big debt. The events center and the golf course are central to Sevierville’s Central Business Improvement District and were funded with borrowings of about $150 million. Next year, $75 million comes due; refinancing is likely.

The big problem with the big debt is tax collections in the CBID earmarked for debt retirement have not grown nearly as fast as the city originally projected. The Great Recession happened and development in the zone has lagged forecasts.

Tarwater is guardedly optimistic about an improved economy and hopes shifting operations to the city will let the PBA refocus on growth.

It “frees the PBA to do capital infrastructure improvements and economic development,” Tarwater said, which could lead to improved CBID tax collections.

Evolution of the sudden, painful type also occurred in Sevierville last Friday. The FDIC seized Sevierville-based Mountain National Bank and sold substantially all assets to First Tennessee Bank National Association. Mountain National, founded in 1998, enjoyed big growth before the big bust disrupted Sevier County real estate and development.

No depositors were damaged but stockholders — 1,500 folks put up the initial capital — had their investments wiped out. As the bank evolves under new ownership, some employees could be hurt if First Tennessee decides to “right-size” the bank.

Evolution is messy and painful. But the strong survive.

Greg Johnson’s columns appear on Wednesday, Friday and the second Sunday of each month. Follow him on Twitter @jgregjohnson. Email him at jgregjohnson@hotmail.com.